The market plunged 5%, triggering a 15-minute circuit breaker, or halt in trading. When that was lifted, the markets fell another 2%, stopping trading for the day.

It's the second time this week that China has had to close its markets under the rules, which are designed to avoid panic selling.

Soros is known for his currency trading. He gained notoriety in Britain in 1992 after making $1 billion betting the UK would have to devalue the pound and leave the European Exchange Rate Mechanism.

Whether you agree that markets are on the cusp of a 2008-like collapse depends on how dangerous you think China's "adjustment problem" — essentially a problem of high debt and low domestic demand - really is.

Domestic demand hasn't been able to pick up the slack left by international trade and this is where the feedback loop starts — low domestic demand leads to low company profitability, which creates difficulties servicing debt. That leads to falling confidence and layoffs, which creates even lower domestic demand. It's a death spiral.

Here are the two scary charts from Qu Hongbin, chief Asia economist at HSBC, that show China is well and truly stuck in this loop:

Here's the quote (emphasis ours):

On the one hand, soft external demand will likely persist. On the other hand, the domestic economy, now in deflation for the first time since 1998, is struggling with falling corporate profitability, elevated debt-financing cost (Producer-Price-Inflation-adjusted cost of borrowing rose 200bps since 2014) and low confidence.

As we noted recently, overcapacity has spread from sectors where it has traditionally resided to the manufacturing sectors, as capacity utilisation fell to a post-crisis low across China's industrial complex. The pace of job creation has also slowed and may slacken further in coming months.